“Everyone from Beijing bankers to Cairo taxi drivers knows and understands the significance of a new Silk Road.” Source
When tremendous business opportunities surface, everyone takes notice.
The Chinese realized this more than 2,000 years ago when they sought to distribute and sell their silk products to the rest of the world. They derived a solution — known as The Silk Road or Silk Trade Route – to connect Asia to the rest of the civilized world.
This ancient Silk Road enabled international commerce on previously unforeseen levels: From the Greeks to the Romans, the Syrians to the Indians, the Armenians to the Chinese, everyone realized the benefits of the new global exchange.
Though political and cultural strife led to the disintegration of the original Silk Road, the promise of global economic opportunity is timeless.
In 2013, President Xi Jinping unveiled a vision for a New Silk Road, with expansive land and sea routes connecting west to east and significantly reducing trade barriers.
The new trade route – known as One Belt, One Road (OBOR) — is materializing right now and those who recognize opportunity are again taking notice.
The One Belt One Road Summit
This week Aconex was one of dozens of organizations that met in Hong Kong at The One Belt One Road Summit to kick-off discussions about the Belt and Road Initiative. This CCTV news report from the Summit (in English) looks at the opportunities that OBOR brings to international companies in Hong Kong, and includes an interview with AEDAS Chairman Keith Griffiths.
Attendees included representatives of diverse industries: Banking and Financial, Logistics and Maritime, Infrastructure Development, Cross-Border Investment, Manufacturing, and Government. One session was presented by Mr Zhang Dijiang, Chairman of the National People’s Congress and the third most senior Chinese government official. Having the counterpart of a US Secretary of State deliver the keynote at a conference is a sign of how big this initiative is.
Given our experience working on projects of national importance, I was excited and energized to be part of this group. Aconex works with Chinese Engineering and Construction firms, including SOEs and has already been selected to support OBOR projects in China and overseas.
History of the Silk Road
The centuries that separate the original Silk Road from the newly conceived One Belt, One Road are vast but the original concept was not much different than that of today. Countries and businesses seeking to expand beyond their local arena needed trade routes to deliver their goods and services on the global stage.
Of course, technologies at the time of the original Silk Road were not what they are today. Originally, horses with carriages travelled via land routes (see red line in map below) and were the primary mode of transportation. Then, with the rise of the Roman Empire, ships were introduced as another means of transportation, extending the Silk Road to new frontiers (see blue line in map below).
The long history of the ancient Silk Road revealed challenges that are not unlike those of today. Political skirmishes, cultural differences, and security issues often plagued the Silk Road forcing closures and re-openings throughout the centuries. In fact, it is these very challenges that brought about the decline of this very successful trade route.
As we look at the opportunities that arise with the new One Belt, One Road trade route, it is fascinating – I would say essential – to maintain an awareness of this history.
Re-Building the Silk Road: The New One Belt, One Road Initiative
President Xi Jinping of the People’s Republic of China introduced the idea of a new Silk Road in a speech at Nazarayev University in Kazakhstan on September 7th, 2013.
The speech, entitled “Promote People-to-People Friendship and Create a Better Future”, referenced the great history of the Silk Road: “The over 2,000-year history of exchanges demonstrates that on the basis of solidarity, mutual trust, equality, inclusiveness, mutual learning and win-win cooperation, countries of different races, beliefs and cultural backgrounds are fully capable of sharing peace and development. This is the valuable inspiration we have drawn from the ancient Silk Road.”
President Xi Jinping went on to talk about the rapid development in China and Eurasian countries and how a “fresh vitality” now exists along the ancient trade routes. He suggested that countries should “take an innovative approach and jointly build an economic belt along the Silk Road”.
This initial proposition now goes by several names — One Belt, One Road (OBOR), The Belt and the Road (B&R), and the Belt and Road Initiative – and it is one of the largest projects ever undertaken, with more than 65 countries spanning several continents.
This vastness, revealed in the photo below, comprises both a land route – the Silk Road Economic Belt, and a sea route – the 21st Century Maritime Silk Road.
The New Silk Road: Collaboration on a Massive Scale
In a comprehensive study of the new Silk Road entitled “China’s new silk route: The long and winding road”, PWC estimates that the OBOR project “has close to 65 countries somehow connected, covering more than half of the world’s population (c. 4.4 billion), around 30% of the global economy and a total infrastructure investment need of around US$5 trillion.”
An infrastructure megaproject of this magnitude will demand collaboration on a massive scale. Not only might it transform the economic and political landscapes of entire continents, it will demand international partnerships across many sectors including transportation, telecommunications, IT, energy, logistics, legal, etc.
As President Jinping noted in his initial speech, “This will be a great undertaking benefitting the people of all countries along the route. To turn this into a reality, we may start with work in individual areas and link them up over time to cover the whole region.”
The massive collaboration necessary to turn the new Silk Road idea into a reality began this week at The One Belt One Road Summit. For me, it helped highlight that this is not just a Chinese initiative for Chinese organizations, but a far-reaching global opportunity for organizations all along the OBOR route and those involved in infrastructure development generally. It’s an exciting time to be involved in major projects – you can see examples that Aconex has helped deliver here.
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